"We are well aware of the fact that our project represents one of the most significant pieces of regional and economic development we've seen for many decades."

Spokesman for environmental lobby group Coast and Country, Derec Davies, said the decision is a major win for the environment, and for the pastoralists affected by the project.

"The judge has clearly stated that the evidence provided to the court in relation to water is unsatisfactory and not in the public interest for this mine to be approved," he said.

"This is an excellent day for Queensland and this is an excellent day for Queensland's famers.

"The judge has clearly stated his concerns for water impacts off the site of the mine. This is a hurdle that’s going to be very high for the company to meet."

Pastoralists pleased with court's recommended conditions

Part-owner of Eureka Station, Peter Anderson, was one of the parties to the Land Court proceedings.

He said he and his neighbours were thrilled with the court's decision to impose water monitoring and licences, and make-good compensation arrangements.

"A make-good agreement on the impact to underground water; that's what we were after," he said.

"We were never trying to stop the mine from going ahead ... our door's always been open if they wanted to come back and talk to us.

"Hopefully after this decision, we hear from them within days to be honest, to start this negotiation process for a worthwhile make-good agreement."

The pastoralists' major concern was with the project's potential impacts on the quality of groundwater.

"We're sort of piggy in the middle," Mr Anderson said.

"If this mine goes ahead, there's every chance that other mines will go ahead in the Galilee Basin and I don't think anyone would dispute that, and we could easily end up surrounded on three sides by mines to our property.